Following its latest quarterly review, global index provider FTSE Russell has confirmed that abrdn will drop out of the UK’s benchmark FTSE 100 index as of 18 September.
For the second time in the past year, abrdn will exit the FTSE 100, which comprises the 100 largest companies by market capitalisation on the London Stock Exchange, and enter the FTSE 250, which is made up of the next 250 largest companies.
The global investment manager, which was formed by the merger of Standard Life and Aberdeen Asset Management in 2017, was previously relegated from the FTSE 100 to the FTSE 250 in last September before rejoining the FTSE 100 a quarter later in mid-December.
Its share price has dropped by more than 12 per cent since the start of this year and its market cap, which sat above £4 billion as of late last year, has fallen to £3.17 billion.
In a statement provided to InvestorDaily, an abrdn spokesperson said: “We have been in this situation before and subsequently climbed back into the FTSE 100.”
“We are confident in our strategy and focused on the things we can control. We are transforming our investments business, growing in the vibrant UK savings and wealth market through [interactive investor] and adviser, and returning significant capital to shareholders.”
In recent months, abrdn has moved to significantly reduce its footprint in Australia, with the firm’s managing director Brett Jollie announcing his departure back in July.
Mr Jollie described the departure as a planned exit and a goal he had been actively pursuing since last December, when abrdn announced plans to restructure its Australian operations.
“I have led this restructure and now it has been executed, the final stage is for me to depart,” he told InvestorDaily in July.
Mr Jollie said that abrdn retained its commitment to Australia and the strong growth opportunity the Australian market presents following the successful completion of the restructure.
As part of this restructure, abrdn has streamlined the execution of its strategy through new partnerships with SG Hiscock & Company and MSC Group.
In its half-year results released last month, abrdn reported £4.4 billion in net outflows amid what chief executive officer Stephen Bird described as a “a challenging macro environment”. Subsequently, its assets under management and administration fell by 1 per cent to £496 billion.
Net operating revenue was reported to be up by 4 per cent to £721 million, while abrdn’s adjusted operating profit rose by 10 per cent to £127 million.
Notably, the adjusted operating profit of abrdn’s investments business was down by 66 per cent to £26 million, reflecting challenging conditions impacting the sector and a 15 per cent decline in revenue to £466 million.
“We continued to move at pace to execute our strategy over the first six months of 2023 in a challenging macro environment,” commented Mr Bird.
“Thanks to abrdn’s revenue diversification and the resilience we have built into our business with the acquisition of Interactive Investor last year, we grew revenue by 4 per cent and adjusted operating profit by 10 per cent over the period.
“We are on track to deliver our £75 million cost savings target in investments as we continue our work to restore that business to a more acceptable level of profitability.”
Mr Bird said that abrdn has made “significant progress” on its strategy outlined in early 2021.
“The business has been reshaped to deliver greater resilience, while getting set to take advantage of fast moving sectoral and macroeconomic factors,” he said.
“There is still work to do to complete our transformation, but as we look ahead to the next phase of our plan, we now have the key management resources on board and a far more secure and dynamic foundation on which we can build for the future.”
Jon Bragg
Jon Bragg is a journalist for Momentum Media's Investor Daily, nestegg and ifa. He enjoys writing about a wide variety of financial topics and issues and exploring the many implications they have on all aspects of life.
